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Jessica Darnbrough
AFG has dismissed claims aggregators need to be regulated, warning brokers that the onus is on them to pick the right partner.
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Speaking to The Adviser, AFG’s general manager Mark Hewitt said aggregators already had to abide by certain laws, as such, they are already regulated to a certain extent.
Mr Hewitt's comments follow speculation that the aggregation industry should be regulated following the demise of Refund Home Loans and the subsequent loss of trail commissions for some franchisees.
“At the end of the day, aggregators need to comply with company law already, so it isn’t necessary to regulate them as well. It is up to the brokers to pick the right aggregator from the outset,” he said.
According to Mark Hewitt, brokers need to be very diligent and do their research before picking an aggregator to align their business with.
“All brokers need to complete a thorough background check on their aggregator. Check the company’s financial statements to see how the business is travelling; have a good look at the lender agreement; and look closely at the aggregator’s PI insurance,” he said.
“Some aggregators will not be willing to provide their financials, this should raise a red flag amongst brokers. Choose to partner with an aggregator that is transparent and has strong IT and support platforms, as well as clear broker, lender agreements.”
